BP Biogas: Greenwashing with the Uneconomic

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By Robert Bradley Jr.

BP is trying to have its cake and eat it too.

And it is being criticized on all sides: the greens for greenwashing its major activity (oil and natural gas production) and mineral energy advocates for engaging in the uneconomic as a contra-capitalist company.

BP head Bernard Looney tries to square the circle with both.

Looney just reported on LinkedIn:

Some brilliant news to share today… bp has just signed a $4 billion deal to buy Archaea Energy – a leading US biogas company that produces renewable natural gas. As I’ve said recently – “putting our money where our mouth is.”  

I realise renewable natural gas might not mean much to people outside the industry so let me explain…  It’s gas from organic waste – homes, cities and farms – that is captured instead of vented into the atmosphere or flared. That gas can then be processed and used for power or transport. A double win for the environment.  

It’s a big deal for our company – accelerating growth in bioenergy – one of our 5 transition growth engines. And it’s a compelling combination of Archaea’s fantastic, fast-growing business and bp’s trading expertise and global customer base – so we’re creating a real biogas leader.   

Plus, it’s another great example of bp doing what we said we would – investing with discipline into the energy transition and supporting our net zero ambition. It’s exactly what our transformation into an integrated energy company is all about.  

So this is a great move – for bp, Archaea, our customers, and our investors. A big thank you to everyone involved – and we look forward to welcoming the brilliant Archaea team. 

Many of the comments were salutary from the BP community. But the negative comments were notable. Mine was:

Government subsidies? Cost and opportunity cost? Greenwashing?
Your investors want to know…

And a better comment by Rachid Melliti:

This is interesting but based on the relative maturity of the company (IPO in 2021?) , The fact it is loss making , and ridden with debt, $3.3b seems an excessive price to pay on the potential returns the company will generate mainly based on BP’s ability to open doors. Is it a matter of having so much cash that acquiring companies seems to be what must be done rather than the right thing to do?

And others:

Archaea Energy is a loss making company. Will this be an asset or a liability?

Another on Looney’s self-congratulations:

… there is little discourse on LinkedIn. It’s puff pieces, humble bragging, and clapping hands when someone does a deal. No one on LinkedIn would question valuation for instance. But hey, if BP wants to double down on being a trash brand it’s their prerogative. On the positive side, finally a SPAC that didn’t lose money for all the bag holders…

Few say anything on this platform that doesn’t go along with the party line for fear of retribution.

The anti-fossil-fuel Left is hardly fooled either:

Chump change off your current balance sheet, Looney. Utter hogwash dressed as greenwash. AramcoCoal India Limited and PetroChina International have the largest global carbon dioxide footprint, followed by ExxonMobilbpBHP and Shell according to the MSCI Inc. Net-Zero Tracker These combined emissions ALONE are on course to give us 2.9 degrees of warming, which is catastrophic. 

bp are also underreporting their Scope 3 emissions at  327.6mln tonnes compared to an estimate of 647.9mln.

… So maybe less greenwash and more deeds. Your grandchildren are judging you already.

Another:

Biogas is to natural gas as holy water is to regular water. It gives it a halo. BP will market it as a sign of virtue to the innumerate masses. “Contains 10% biogas” or whatever. 

And an obvious observation:

Given the quantity of commercially available gas in the world today this seems like a complete waste of $4 billion.

Final Comment

It is time for real oil and gas companies to Go Proud. Chevron has moved in this direction. Jamie Dimon, head of JP Morgan also. Liberty Energy has a lot of ideas for the oil majors. After oil, IEA’s Fatih Birol and US DOE’s Jennifer Granholm have pleaded for more of the real thing.

Alex Epstein’s Fossil Future has provided the blueprint. BP needs to ditch both ‘beyond petroleum’ and Net Zero and get back to its core business.

The post BP Biogas: Greenwashing with the Uneconomic appeared first on Master Resource.

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October 18, 2022